Public services in Portugal have been halted as unions staged the country's first general strike in more than two decades to protest spending cuts that the government says are vital to avoid financial disaster.

Both public and private sector workers joined the one-day strike on Wednesday, which follows similar strikes in other troubled Euro economies such as Greece and France, as governments are forced to implement unpopular austerity measures.

The transport sector was crippled by the stoppage with no flights taking off or landing at any airport.

More than three-quarters of train services were also cancelled and 60 per cent of bus services were also scrapped, officials have said.

The metro system in Lisbon was also closed for the day while the capital's ferries stayed in their docking berths.

The strike, the first that brought together private and public sector workers since 1988, also hit banks, media organisations and petrol deliveries.

Union leaders said the strike had a "massive impact" on the private sector, in particular on the auto sector with less than 10 per cent of the workforce turning up at Volkswagen's Autoeuropa plant near the northern city of Porto.

"The mobilisation of workers is enormous," said Manuel Carvalho da Silva, the head of the major CGTP syndicate.

Drastic cuts

The strike began on the stroke of midnight with union members setting up picket lines across the country, including outside Lisbon's international airport.

The unions' anger has been stoked by government plans for a drastic round of spending cuts and tax rises, worth some $6.85bn which are currently being pushed through parliament.

The package of cuts is intended to reduce the deficit from 7.3 per cent of the gross domestic product (GDP) to 4.6 per cent next year in a bid to quell growing international unease over the state of its finances.

Portugal's main opposition party said on Tuesday it would not block the government's 2011 budget, paving the way for its adoption on Friday.

But the unions say the cuts are intolerable, particularly from a Socialist government led by Jose Socrates, the prime minister .

"It is unacceptable that workers are making all the sacrifices," said Joao Proenca, a unionist, told AFP news agency.

"We cannot accept that the first, second and third priority of Portugal is the deficit," he added, referring to the country's 10.9 per cent unemployment rate - a record high.